Guide to Buying Real Estate

The first step in buying a new home is to familiarize yourself with the real estate contracts.  Real estate contracts are rather lengthy so it is important that you understand the rights and obligations you agree to when entering into a legally binding contract.  Real estate agents are trained to explain the contracts to their clients.  Your agent must provide you with a sample contract.  You should read over the sample contract and ask your agents about the unclear areas in the contract.  The agent will explain the contract and the repots associated with the real estate transaction.  This process takes significant pressure off the client during the negotiation process.  Everything should be put in writing and the words should be specific and cautiously chosen. In the event of litigation, it is what is in writing that matters to the courts.

When you have found your new home, there are a few things you need to look into before making an initial offer.  First, try to investigate other similar homes that were sold in the same neighborhood and base your offer on those numbers.  Secondly,  find the seller’s motivation. Why is the seller selling their home? Why are they moving? How long has the home been on the market? And so forth.

On the other hand, the agent considers the following before writing up an offer. Is the property still for sale or are these offers pending? Is it a probate or foreclosure sale? How much do the sellers owe and are they willing to carry back a loan?  And who pays for certain transfer fees. 

All these issues affect how a contract will be written up.  The negotiation process can be emotional so as a client, you have to be realistic with your offer. If you put forward a “lowball” offer, the seller may reject it along with further offers.

Your agent will advise you on a reasonable offer and will present it to the seller.  Furthermore, your agent will defend your offer and explain the reasoning behind it.  It is best if you are not present at the negotiation between your agent and the seller. This way your agent can be more effective.  Your agent knows more about the offer and the details entailed and can therefore present your offer in a positive light to the best of their ability. 

While the agent advises you on a reasonable offer, ultimately you have the final say on how much the offer will be.  If your offer is reasonable, expect your agent to come back to you with a counter offer from the seller.  At this time, you will be signing many papers including lease agreements to purchase contracts, contract addendums, reports, disclosures and counter offers.  Keep copies signed by all parties for your records. 

After your offer has been accepted by the seller, the closing process begins.  During this time inspection of the premises will be ordered and scheduled.  Consequently, the loan process begins. This also involves a lot of paper work and can be confusing due to the information load it entails.  Your agent will stay with you throughout the transaction and walks you through the steps of the closing process.    

Keep an open mind, be realistic and educated about the whole real estate transaction which typically takes 30 to 45 days to close  after a contract has been accepted.

Clark Dixon

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